June 2026 - Aspen Grove Outlook

Nothing Moves in a Straight Line

If there is one lesson investors continually relearn, it is this: markets rarely move smoothly for very long.  Over the past several years, investors have navigated inflation spikes, aggressive Federal Reserve tightening, banking concerns, geopolitical tensions, and now a massive wave of enthusiasm surrounding artificial intelligence. Yet despite all the uncertainty, the market has continued climbing what Wall Street often calls “the wall of worry.”

Recently, concerns have shifted back toward inflation after stronger-than-expected inflation reports and rising oil prices tied to Middle East tensions. But Stephen Auth and his team at Federated Hermes continue to believe the bigger force driving markets remains strong earnings growth, improving productivity, and resilient economic activity.

That distinction matters.  Historically, moderate inflation has often hurt bonds more than stocks — especially when businesses continue growing earnings. Today, artificial intelligence may also be contributing to one of the largest productivity waves we have seen in decades.

Are We Seeing Another 1999?

There are certainly similarities:

• excitement surrounding transformative technology,

• massive infrastructure spending,

• concentrated leadership in large technology companies,

• and growing investor optimism.

  
  

But there are also important differences.

Unlike many speculative companies during the dot-com era, today’s market leaders are enormously profitable businesses generating real cash flow. AI appears capable of producing genuine productivity gains across many industries. 

Still, history reminds us that even real technological revolutions can experience periods of excess.

One interesting parallel to the late 1990s involves technology spending itself.  In 1998 and 1999, companies spent aggressively upgrading systems ahead of Y2K concerns. Once January 1, 2000, arrived, technology spending slowed sharply, contributing to the unwinding of the tech bubble.

Today we are again witnessing enormous spending on:

• AI infrastructure,

• data centers,

• semiconductors,

• networking equipment,

• cloud computing,

• and power generation.

  
  

The key question is not whether AI is real.  It clearly is!

The question is whether the current enormous levels of spending will suddenly drop because of an event like Y2k? Although we are constantly on watch for any sign of this happening, we don’t believe that is likely this time around.

Why We Still Own Stocks Even When Markets Feel Risky

One of the greatest long-term threats to retirees is not market volatility alone.  It is inflation quietly eroding purchasing power over time.  Many retirements now last 25–30 years or longer. During those decades, the cost of healthcare, housing, travel, and everyday living expenses can rise dramatically.

That is why we continue to believe owning productive businesses through equities remains essential for long-term financial planning.

Historically:

• 10% pullbacks occur regularly,

• 15% declines happen more often than most investors realize,

• and even 20% corrections are part of normal market history.

  
  

What makes investing emotionally difficult is that markets often recover before investors feel comfortable again.  Some of the market’s strongest rebound days historically occur very close to periods of maximum fear and pessimism. Missing those recovery periods can significantly damage long-term returns.

What We Are Watching Now

AI and Productivity

One of the more encouraging developments is the rise in productivity tied to AI adoption. Auth notes that productivity gains have exceeded long-term averages, helping companies expand margins despite inflation pressures.  A record 80% of companies beat analyst’s expectations in the first quarter.

Market Broadening

While mega-cap technology companies receive most of the headlines, market leadership has begun broadening beneath the surface. Small caps, value stocks, and emerging markets have recently shown improving participation.

Infrastructure and Power Demand

AI data centers require enormous amounts of electricity. That demand is creating growing opportunities in utilities, power generation, transmission infrastructure, and water systems — the “picks and shovels” supporting the AI buildout.

Final Thoughts

At times like these, investors are often pulled toward one of two extremes:

• excessive optimism,

• or excessive fear.

  
  

Neither tends to serve long-term investors particularly well.

Our objective remains unchanged:

• build resilient portfolios,

• remain disciplined during volatility,

• manage risk thoughtfully,

• and stay focused on long-term goals rather than short-term headlines.

There will be corrections. There will be unsettling news cycles. There will be periods when markets feel uncomfortable.

But history consistently reminds us that patient investors who remain disciplined through uncertainty are often rewarded over time.

Thank you for the continued trust you place in us.

Warm regards,

Dave Crouch

Aspen Grove Asset Management

Buffett Quote:

“The big money is not in the buying and the selling, but in the waiting.”

— Charlie Munger (Warren Buffet’s partner)

Disclosures:

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor."

The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

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